HV Biz News Archive Economic alternative
Economic alternative
It is hard to think of a more traditional business than HVAC. Heating ventilation and air conditioning have been integral to America’s buildings and thus it’s economy, for most of the last century. So it may be indicative of a greening economy, both financially and environmentally, when a second generation HVAC owner said doing geothermal installations helped his company emerge from the Great Recession and that new energy efficient HVAC and hybrid systems are moving the company toward a profitable future.
“I am one of the first (HVAC companies] in the area to get into geothermal, and the thing that really helped us through the tough times was geothermal,” Keith Bell, President of Bell Heating and Air Conditioning in Mahopac. “In what new construction is going on, there’s not a lot of it, but when you do the numbers, and include the tax credits, it becomes the economic choice, not just the green choice. Or you could say it’s the green choice because of the cash it provides.”
Bell does residential and small to medium size commercial HVAC design, installation and service. By Bell’s calculations, when heating oil reaches three dollars a gallon, a geo-thermal system pays for itself in seven years, after which, savings accumulate rapidly with heating and air conditioning bills drastically reduced or eliminated.
“And geothermal works at night and works when it’s not windy so it really it a good alternative,” said Bell, who paused, then added, “and it is really not much of an alternative anymore. It is becoming mainstream. The biggest questions I get are does it work and will it save money. And the answers are yes and yes.”
A geothermal system costs about twice as much as a standard heating and cooling system, with Bell’s company designing and installing a geothermal system in a 4,000-square-foot office building in White Plains recently for about $80,000. A standard system would cost about $40,000, but there the trend lines reverse, with the geothermal accumulating savings while a standard system entails continuing outlay for oil and electricity. With tax credits now in place, and heating oil at $3 a gallon, payback time is about seven years, he said, not including the good will that is immediately cultivated with customers who appreciate a business making an environmentally sensible choice.
He said that talk of environmentally sensible choices are not yet common in HVAC circles, where fossil fuels are viewed as tried and true.
Bell’s farther, Alfred, started the company in 1980 in the garage of his house and then in a small extension built off the back. In 1985 the company built a 6,000-square-foot facility on Route 6 in Mahopac where it remains today. “He grew pretty quick; obviously the economy in the ’80s helped a lot,” said Bell.
The company now has 20 employees and does about $4 million in annual business, said Bell, a licensed engineer who joined forces with his father in 1993 to stay with his wife and two daughters in the area rather than accept a transfer to Albuquerque to design clean rooms for IBM.
Bell’s background as a designing engineer gives his company an edge, he said, by working directly with building owners to design an HVAC system and install it properly.
Bell took over as president in 2002 and said business was robust until the recession. Now, he said, new construction work is down some 40 percent from prerecession times. He said economic recovery is still only talk. “People are talking more, just this last two months we have seen a lot more to bid on,” he said. “It feels better, but the numbers aren’t so much better yet.”
In the meantime, Bell is exploring additional efficient methods of heating and cooling houses and commercial buildings that don’t involve fossil fuels, such as solar thermal installations and a new generation of heat pumps. He said while doing right by the environment is a nice perk, the bottom line adds up to choosing efficiency.
“When you do the numbers,” Bell said, “It becomes the economic choice.”
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